Connective tissue disease-associated interstitial lung disease (CTD-ILD) presents with heterogeneous manifestations and limited treatments, significantly impacting patients' lives. Tetrandrine, a bisbenzylisoquinoline alkaloid, demonstrates immunomodulatory and anti-fibrotic properties that may enhance pulmonary function and slow disease progression. This review synthesizes mechanistic and clinical evidence, emphasizing tetrandrine's regulation of the inflammation-immunity-fibrosis network as a novel CTD-ILD therapy, where chronic inflammation triggers immune dysfunction and leads to irreversible extracellular matrix deposition. Key findings illustrate its ability to modulate immune cells, reduce oxidative stress, and inhibit fibroblast activation. These mechanistic pathways culminate in clinically meaningful therapeutic outcomes. Tetrandrine demonstrates clinically relevant actions by reducing inflammatory cytokine release to improve alveolar microenvironment, attenuating fibroblast activation to decrease extracellular matrix deposition, and preserving lung architecture which correlates with improved pulmonary function in preclinical models. Its dual anti-inflammatory and anti-fibrotic profile may complement existing immunosuppressants for CTD-ILD patients with progressive fibrosis while potentially reducing dosage requirements. Therefore, we evaluate tetrandrine's potential for integration into current CTD-ILD management and identify future research directions to facilitate clinical translation by synthesizing current evidence, offering insights for developing natural drug-based therapies.